Deutsche Bank

Weak or strong?

A veteran ducks out

WILL the abrupt departure of Ulrich Cartellieri, long a strong man on Deutsche Bank's supervisory board, weaken or strengthen Josef Ackermann, the bank's beleaguered chief executive? That was the question buzzing round Frankfurt banking circles on September 22nd, when it was reported that Mr Cartellieri would leave. Only the day before, Germany's biggest bank had announced a shake-up in its management structure.

Investment banking is to be streamlined under two co-heads; and Jürgen Fitschen, a German, will be in charge of a new management committee for Germany. The latter change is apparently intended to answer criticism that the bank had neglected its German roots while trying to build a global presence. It seems that Mr Cartellieri was not convinced. It is unprecedented for a member of Deutsche's supervisory board to quit so suddenly. He served on the management board from 1981 to 1997 and is revered within the bank.

The monthly that broke the story of Mr Cartellieri's departure, Manager Magazin, claims that others on the supervisory board share his reservations about Mr Ackermann's running of the bank. Several German newspapers, which have taken to hounding Mr Ackermann, have argued this week that he has lost the credibility to see through the acquisition of another big German bank, which they believe is now needed to bolster Deutsche's customer and capital base. On the other hand, a number of investment bankers believe that without Mr Cartellieri around Mr Ackermann will be freer to pursue the goal he has set the bank.

That, above all, is to increase its pre-tax return on equity to 25% by the end of next year. Mr Ackermann's strategy has been to rely heavily on investment banking and trading profits, while shrinking the bank's low-margin lending and attempting to expand the retail and private client base. But he has had trouble achieving the right balance.

Will the new structure help? Hmm. Mr Fitschen, billed as the new German supremo, has no power over the profit-and-loss account of any part of the bank. “No P&L means no control,” snorted a rival investment banker. The new heads of corporate and investment banking, Anshu Jain and Michael Cohrs, do have such control and appear to have strengthened their hand. That might make it more difficult for Mr Ackermann to take any step—such as an acquisition of another German bank—which could temporarily affect Deutsche's dealings in the capital markets, where their part of the bank makes its money.

Mr Ackermann may have streamlined the structure, but his ability to steer a new course is still in question. At least there is no obvious challenger for his job.